We will have to be better

By Pete Niebling Executive Vice President North American Wholesale Lumber Association

HENAWLAwholesaler. and the producers and the retail dealers . . will have to work harder and be "better" in 1986 if they are looking for profitability.

The bottom line of most business forecasts for next year is a repeat of 1985 for the forest products industry. The marketplace will remain highly competitive. supply will continue to outpace demand. We will have about the same level of residential housing activity. Other forest product markets will approximate 1985 in volume and demand.

At the manufacturing level, there will be those who will continue to strive to be the "lowest cost producer." At the retail level, there will be continued emphasis on buying right and tight inventory controls. We would suggest to our suppliers and customers that in addition to these concepts, they would be well served to consider what the wholesaler must do to be profitable in 1986. Wholesale lumber firms are going to have to work harder, sell more aggtressively, implement operating cost containment wherever possible and develop long-term marketing strategies to be profitable in 1986.

Long-term marketing strategies cover a number of areas. The successful wholesaler must start with personnel. They need to continue to improve their motivation and their knowledge of markets and products. In addition, supplier-wholesaler relationships and wholesaler-customer relationships must be continually enhanced by performing the wholesale function better than ever. As firms strive to become "the most efficient wholesalerdistributor" they will also have to deal with operating costs and industry problems such as transportation and business insurance costs.

It won't be easy to be better in 1986. Time is the primary obstacle. Yet, there is no other answer to being profitable in a mature industry marketplace.

Over recent months, NAWLA has been advocating that mills and wholesalers network with each other at every opportunity. The changes going on at both levels of the industry will re- quire this increased interface. Dstributors must know what the needs of the supplier are. In turn, the producer must be exposed to the changes in the marketplace. Our Regional and Sector meetings this past fall clearly indicate that many wholesalers and mill sales managers are implementing increased dialogue with one another.

For many months, NAWLA has suggested that the forest products

Story at a Glance

Wholesalerc, producers, retaalers have to work harder...supply will outpace demand...strategy and cosl contaanment important...imporlance of training.

salesperson of the '80s must be more professional and more knowledgeable. Again, we are pleased to note that the two 1985 NAWLA Wood Marketing Seminars had full enrollment and that sales of the NAWLA In-House Training Video Tapes remain brisk. A great deal of time, effort and money is being spent by NAWLA wholesalers to improve their staff people.

Networking and upgrading the professionalism of staff are long-term strategies. They will pay off in 1986 but such gains will continue in future years as well.

For the short term there is cost containment. Success in this area next year will likely be in the area of electronic data processing, telephone expense and business insurance. There is a business crisis in company insurance and those firms who best contain these operating costs will fare the best in the coming months.

The industry today is composed of survivors from the slump of the early '80s. Yet, there seems to be no industry boom on the horizon and there are plenty of problems that lumbermen are trying to deal with. We would suggest that the survivors oftoday have to be the prolitable survivors of tomorrow. It will demand more time, more commitment and more planning.